PSEI Market Update – June 23, 2014

By: Marvin Germo | June 23, 2014

I finally have time to write a bit! It’s been a set of action packed weeks of tapings, guestings, and talks! But I just love what I do that I get to touch more and more Filipinos and bring them closer to Financial Freedom! It’s just my greatest desire to continue to bring more and more people from consumers to investors. I really believe that there’s just so much more in store for our country and that our greatest days have yet to come!

Now back to the charts! Majority of the sections in this article would be appreciated better with a background on Technical Analysis and charts.

As the first half of the investing year almost comes to a close. The steep decline that people we’re anticipating to happen in May this year did not come to pass. One thing is evident though, we have more foreign buyers in this period than the same period last year. I believe this has prevented the market from going down as massively as last year. As what I always say, more buyers bring the prices up and more sellers bring the prices down.

(chart 1: May 2013 – June 2013 decline of the PSEI)

Looking from Chart 2 though, it is evident that the market is no longer in an uptrend. This currently brings an end to the almost 6 month run from December 2013 – May 2014 of the PSEI. For those who have positioned at the end of 2013 and at the beginning of 2014, this break continues to be a signal for you to take your profits and rake in some of the earnings for the year. As an investor or trader, you can always come back and buy select stocks again once you see a new uptrend has been formed.

Again your goal is to be in the market when it counts the most and that is when the market is moving up.

(chart 2: PSEI’s break from the uptrend)

Now that the uptrend is broken, the market has been sideways (going nowhere) since the start of June 2014. Heavy selling is still apparent at 6,800and buyers are resurfacing at 6,650. If you would want to respect and trade this season you just have to watch out for this ranges as areas for you to buy and sell. Buying area is still at 6,650 while selling is at 6,800.

(chart 3: PSEI now sideways)

For the PSEI to go back to the uptrend it must convincingly go beyond 6,900 for it to have a chance of going past 7,000 once again. But for this to happen it must break 6,800 first and stay there for an extend period to validate the buying range of 6,800.

However if the PSEI fails to go above 6,800 and also drops the 6,650 range. We may expect the market to go to as low as 6,530 over the near term.

As always, all of this analysis are mostly based on the charts above. Growth and fundamentals of our market is very much strong! Our market though is still more expensive than the previous months and we are still at 20++ P/E ratio which makes us more expensive compared to other markets. It’s great to buy uptrends but in the same regard it great to buy uptrend stocks that are still cheap.

Looking forward to write more over the next few days again! God bless you! If you have any questions feel free to tweet me @marvingermo and #chartsbyrequest so I can answer your queries real time!